Currency: Euro (EUR)

Capital: Lisbon

Official language: Portuguese

Payroll Cycle: Monthly

Paid Time Off

In Portugal, employees are entitled to 22 days of paid holiday a year.

Public Holidays

13 public holidays take place each year.

• New Year’s Day
• Good Friday
• Easter Sunday
• Freedom Day Portugal
• Labour Day
• Corpus Christi
• Portugal Day
• Assumption Day
• Republic Day Portugal
• All Saints day
• Independence Day Portugal
• Immaculate Conception
• Christmas

Individual Income Tax

The individual income tax average ranges from 14.5% to 48%. This tax depends on many variables, such as marital status, level of income, among others.

Employer Cost

Approximately, 37.40% of employee salary.

Employment Contract Details

All documents must be presented to the local authorities. Bilingual contracts are allowed and recommended.

Probation Period

Probation periods are determined by the type of contract the worker is engaged under and seniority.

• Fixed-term contracts that last under 6 months can include a probationary period from 15 days to 30 days.
• Indefinite contracts can include a probationary period of 90 days.
• Indefinite contracts for senior management include a probationary period up to 240 days for senior management.

Minimum Wage Requirements

The Minimum Wage is EUR 775.83 per month.

Maximum working hours and overtime

Maximum working time is generally 8 hours a day, 40 hours per week. Hours above the maximum hours per day are treated as overtime and need to be remunerated with an overtime supplement.

Bonus and Expense Payments

There are 2 bonuses that must be paid in Portugal: 13th & 14th salary. This bonuses are subjected to income tax and social security withholdings.

Parental Leave

To be eligible for paternity leave, employees must have contributed to the Portuguese Social Security System for at least 6 months. The Social Security System will pay 100% of the salary for the leave.

• Maternity Leave: employees receive 30 days of leave before the birth of the child and 6 weeks afterwards. The pay during this time is calculated and paid by the social system
• Paternity Leave: employees can take 10 days’ paternity leave within 30 days following the birth. 5 days of this must be taken consecutively immediately after the birth of the child.

Sick Leave

Employees who have contributed into the Portuguese Social Security System for the past 6 months are entitled to paid sick leave after the first 3 days of sickness. The first 3 days are unpaid and considered as a qualifying period. The pay will be in charge of the state and will depend on the length of the sickness:

• From 3 to 30 days - 55% of base salary
• From 31 to 90 days - 60% of base salary
• From 91 to 1 year - 70% of base salary
• Over 1 year - 75% of base salary

Portugal does not allow at-will termination of employment for employers. Contracts can be terminated by any party with or without cause. If the agreement is terminated unilaterally a justification is needed: serious cause, unfit for the role, extinction of the role.

Severance pay is typically 12 days of the base salary for each full year of employment.

Notice Period

The minimum notice period is 1 month, and the maximum 4 months. The length will depend on the labor relationship.